The land lands are looking for disappointing 3Q earnings
MINNEAPOLIS (AP) – Target is investing online and in stores brings customers, but they are also blowing the bottom line.
The company's shares fell sharply before the opening clock Tuesday after Target lost expectations for the third quarter, the last glimpse of the dealer's performance while entering the holiday trade season.
At the same time, revenue in the stores for a period of at least one year increased 5.3 percent, the sixth quarter in that direction. And net sales increased by 49 percent. In the previous quarter, Target achieved the strongest same retail growth in 1[ads1]3 years.
The battle for customers has been anchored in ease of use, and Target jumped ahead of competitor Walmart with free, two-day delivery for delivery. Amazon followed by dropping $ 25 minimum for free delivery.
At the beginning of the year, Target began an aggressive three-year plan to invest $ 7 billion in its stores and online operations. The company has rebuilt its stores and building brands from the ground up as trendy electronics under the Heyday brand and men's brand Goodfellow. However, with increasing pressure from online behemoth Amazon and shoppers demanding more convenience, a large proportion of these investments go against converting their stores to shipping hubs to reduce shipping costs and speed deliveries. It has expanded a number of services that allow people to pick up goods on the market or get delivery after some purchases.
Behind the scenes, it has been remake backroom operations in 1400 of the 1800 stores that send online orders to customers. Target says that overtaking had been important in its ability to offer two days free shipping this holiday.
| Ticker | Security | Last | Change | % Chg |
|---|---|---|---|---|
| TGT | TARGET CORP | 77.79 | -1.89 | -2.37% |
Target exclusively told AP that it was transforming the packing stations, while the employee tasks are now divided into clear roles: picking, prep orders, packages and varieties. Paint workers have also got new tools like new cars that have room to make it easier to organize the orders. They are also armed with new apps on their phones that help them navigate in the store to find online orders faster or tell them exactly how much tape will be placed over the Tide box so that it does not open during shipping.
About 130 stores have undergone a comprehensive backroom overhaul, complete with conveyor belts and LED lighting similar to the store's sales floor. The changes shave seconds of each task and add up to a few minutes of storage that will cause shipping costs.
The new measures emphasize how Target doubles to be more effective. Two thirds of Target's online volume now goes through the stores, with more than half of the orders being sent to homes. The rest is from the order of pickup or curbside pickup services. When Target sends an online order from a store, it is sent two days faster on average than shipping from a delivery center. In fact, 90 percent of Targ's two-day online deliveries are handled in stores. Revamped backrooms make three times more volume than the rest of the chain. It has helped Target become 25 percent more effective in shipping online orders than last year, according to the company.
"We try to speed up the guests and the sooner we can get in the back room, the sooner we can make that promise," said John Mulligan, chief operating officer, during a telephone interview with The Associated Press. He says the ultimate goal: a 24 hour turnaround between when a product is sold between when the new product is replaced and back in the store.
Goals say that all the new improvements in their online business will enable the company to meet twice as many orders for the holiday trade season as it did last year.
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Mulligan said that it distributed engineers and analyzes to analyze each step of the process to determine where the bottlenecks were and how to eliminate them.
During a walk in the backroom of Target's Edison, NJ Store, workers assume specific tasks in assembly line operations in a room that is about 12 parking spaces.
Workers now use new cars that have 19 rooms that can keep everyone's orders separated. Previously, workers put order in two baskets in the shopping cart.
All this is made to make the job "simple and repeatable as possible," Mulligan said.
Nevertheless, the latest results show that Target has more work to do to keep costs down.
The company reported revenues of $ 622 million, or $ 1.17 per share. Per-share earnings without one-time benefits and pretax gains were $ 1.09, 2 cents of expectations, according to a survey from Zack's Investment Research.
Revenue for Minneapolis retailer was $ 17.82 billion and challenged only Wall Street expectations. 19659002] Target expects annual revenues in the range of $ 5.30 to $ 5.50 per share
